Money deal may not be enough for N. Korea

Saturday

Jun 16, 2007 at 12:01 AMJun 16, 2007 at 6:18 AM

BY JAE-SOON CHANGTHE ASSOCIATED PRESS

SEOUL, South Korea - North Korea warned Friday it might increase its "self-defense deterrent," a term the communist nation usually uses to describe its nuclear program, even as its key condition for nuclear disarmament was being met.
North Korea's warning raised concerns the recalcitrant regime might be trying to find another reason to postpone disarming. As the statement was released, millions of dollars in frozen funds were headed to North Korean accounts, apparently resolving a banking dispute the country had used as a reason to delay.
North Korea has refused to act on its February pledge to shut down its nuclear reactor until it gets access to $25 million once frozen in a U.S.-blacklisted Macau bank.
Claiming the money freeze was a sign of Washington's hostility, North Korea boycotted international nuclear talks for more than a year, during which it conducted its first-ever atomic bomb test in October.
A South Korean government official said Friday the money has "reached Moscow at its central bank" and was awaiting deposit in North Korean accounts in Russia.
If the money goes into North Korea's accounts, it means the financial dispute is fully resolved, the official said. But he did not say when the deposit could take place.
In Washington, the State Department said Friday it was looking into North Korea's latest warning.